Portugal consumer confidence high despite economic indicators

The Portuguese Consumer Confidence Index in the final quarter of 2016 rose by eight points to an “all time high” of 74 points, according to the latest Nielsen Global Consumer Confidence report.

The Portuguese economy gained some momentum in the second half of the year 2016, bringing an overall growth rate to the second highest level in six years, mainly supported by a gradual recovery in exports.

Moreover, private consumption benefited from an improvement in the labour market, even though this was partly offset by an acceleration in inflation.

The level of Portuguese consumer confidence exceeded countries such as Finland, France and Italy .

47% of Portuguese use it to make savings (a figure that is much higher than the European average of 36%) and 11% say they may invest it in a pension fund.

Perceptions of Portuguese consumers have improved significantly to the point that they don’t consider their country to be in economic recession and believe in an economic recovery over the next 12 months.

The public perception of confidence is contradicted by key European Union economic indicators.

The fragile banking sector continues to hold back state and private investment, which has slowed down sharply from 26 % of GDP in 2006 to 14 % by the end of 2016.

GDP growth is also projected to remain low, at about 1 ¼ % in 2017 and 2018.

European Union reports that Portugal’s high level of public debt, which has risen sharply from 60 % of GDP in 2006 to 130% of GDP at the end of 2016 and the economy’s weak growth rates continue to undermine the investment environment.

There are concerns that this move will cause a further deterioration in the already weak financial situation ,which the man in the street does not seem to worry too much.

To a certain extent this public feeling of confidence has been boosted by the Portuguese Government optimistic approach to the economic panorama forecasts.